The F-35 Lightning II, also known as the Joint Strike Fighter (JSF), is the Department of Defense's (DOD) most costly and ambitious aircraft acquisition, seeking to simultaneously develop and field three aircraft variants for the Air Force, Navy, Marine Corps, and eight international partners. The JSF is critical for recapitalizing tactical air forces and will require a long-term commitment to very large annual funding outlays. The current estimated investment is $323 billion to develop and procure 2,457 aircraft. As required by law, this report discusses (1) program cost, schedule, and performance; (2) manufacturing results; and (3) test plans and progress. GAO's work includes interviews, cost data, test plans, production measures, and analyses by defense and contractor officials. GAO recommends that DOD (1) make a new, comprehensive, and independent assessment of the costs and schedule to complete the program, including military construction, JSF-related expenses in other budgets, and life-cycle costs; and (2) reassess warfighter requirements and, if necessary, defer some capabilities to future increments. GAO also suggests that Congress consider requiring DOD to establish a management tool to help Congress better measure the program's progress in maturing the weapon system in a variety of areas to include cost estimating, testing, and manufacturing.

This is GAO's seventh annual assessment of selected Department of Defense (DOD) weapon programs. The report examines how well DOD is planning and executing its weapon acquisition programs, an area that has been on GAO's high-risk list since 1990. This year's report is in response to the mandate in the joint explanatory statement to the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009. The report includes (1) an analysis of the overall performance of DOD's 2008 portfolio of 96 major defense acquisition programs and a comparison to the portfolio performance at two other points in time--5 years ago and 1 year ago; (2) an analysis of current cost and schedule outcomes and knowledge attained by key junctures in the acquisition process for a subset of 47 weapon programs--primarily in development--from the 2008 portfolio; (3) data on other factors that could impact program stability; and (4) an update on changes in DOD's acquisition policies. To conduct our assessment, GAO analyzed cost, schedule, and quantity data from DOD's Selected Acquisition Reports for the programs in DOD's 2003, 2007, and 2008 portfolios. GAO also collected data from program offices on technology, design, and manufacturing knowledge, as well as on other factors that might affect program stability. GAO analyzed this data and compiled one- or two-page assessments of 67 weapon programs. Since 2003, DOD's portfolio of major defense acquisition programs has grown from 77 to 96 programs; and its investment in those programs has grown from $1.2 trillion to $1.6 trillion (fiscal year 2009 dollars). The cumulative cost growth for DOD's programs is higher than it was 5 years ago, but at $296 billion, it is less than last year when adjusted for inflation. For 2008 programs, research and development costs are now 42 percent higher than originally estimated and the average delay in delivering initial capabilities has increased to 22 months. DOD's performance in some of these areas is driven by older programs, as newer programs, on average, have not shown the same degree of cost and schedule growth. For 47 programs GAO assessed in-depth, the amount of knowledge that programs attained by key decision points has increased in recent years; but most programs still proceed with far less technology, design, and manufacturing knowledge than best practices suggest and face a higher risk of cost increases and schedule delays. Early system engineering, stable requirements, and disciplined software management were also important as programs that exhibited these characteristics experienced less cost growth and shorter schedule delays on average. Program execution could be hindered by workforce challenges. A majority of the programs GAO assessed were unable to fill all authorized program office positions, resulting in increased workloads, a reliance on support contractors, and less personnel to conduct oversight. In December 2008, DOD revised its policy for major defense acquisition programs to place more emphasis on acquiring knowledge about requirements, technology, and design before programs start and maintaining discipline once they begin. The policy recommends holding early systems engineering reviews; includes a requirement for early prototyping; and establishes review boards to monitor requirements changes--all positive steps. Some programs we assessed have begun implementing these changes.

In preparing the report, the review was required to include the feasibility and advisability of seven potential modifications of DOD's organization and structure for MDAPs. We were charged with reporting on the feasibility and advisability of (1) establishing a process in which the commanders of combatant commands (COCOM) assess and provide input on the capabilities needed to successfully accomplish their missions over a long-term planning horizon of 15 years or more; (2) establishing a materiel solutions process for addressing identified gaps in critical warfighting capabilities, under which the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD (AT&L)) circulates among the military departments and appropriate defense agencies requests for proposals for technologies and systems to address such gaps; (3) revising the acquisition process by establishing shorter, more frequent acquisition program milestones; (4) requiring the milestone decision authority (MDA) to specify at the time of milestone B approval the period of time that will be required to deliver an initial operational capability (IOC) to the commanders of the relevant COCOMs; (5) establishing a new office to provide independent cost and performance estimates; (6) requiring certifications of program status to the Defense Acquisition Executive (DAE) and Congress prior to milestone approval; and (7) modifying the role played by Chiefs of Staff of the Armed Forces in the requirements, resource allocation, and acquisition processes.